​​Change a public limited company in India to a private limited company

A company that is owned by the public is called a "public limited company," or PLC for short. It is a limited company with shares that can be bought and sold by anyone. PLCs can be listed on stock exchanges or not. To be a PLC, there must be at least three directors.

A company that is privately owned is called a private limited company, or LTD. This means that the business owner's liability is limited to the value of their shares, and there can only be 50 shareholders. It also makes it hard for shareholders to sell their shares in public.

Benefits of a Private Limited Company

We've compiled a list of some of the advantages of incorporating or converting your business to a private limited company.It is the most popular business model in the world and offers many benefits to those who use it.

Members are only responsible for their shares.

Shareholders only have to pay for their own shares if something goes wrong. Financial risks are a part of doing business, but they must be kept to a minimum to keep the business moving forward. In an LLC, if the company had to close for any reason, the shareholders wouldn't lose their own property.

Trading Stocks with Mutual Consent

When two shareholders trade shares, the risk of a takeover is lessened because shares can only be sold or bought with the agreement of both parties.

Perpetual Existence

When a private limited company is incorporated, it keeps going even after the owner dies.

No financial responsibilities

LTD doesn't have to tell the public about its finances like Public Limited does.

Lesser Restrictions

Compared to a public limited company, it has fewer legal restrictions. In a public limited company, you have to call a meeting of all the members, but you don't have to do that in a private limited company.

There is no special requirement to start a business.

After incorporating, the public company needs a Certificate of Commencement of Business to start doing business. A private company, on the other hand, can start its business as soon as it gets a Certificate of Incorporation.

​​Public Limited Company to Private Limited Company in India Eligibility Criteria

Before you can change from a public limited company to a private limited company, you must meet the following conditions:

1. All of the board members need to agree on the decision to convert.

2. You must be willing to change the Memorandum of Association.

3. All of the annual compliance requirements must have been met by your company.

4. Before you can do this conversion, you need to get permission from your creditors.

Your company must have paid back or earned interest on all deposits and debentures that have come due.

​​What Documents Are Needed in India to Change a Public Limited Company to a Private Limited Company?

Along with the public-to-private conversion application, the applicant for the change must submit the following documents and e-forms:

The E-form MGT 14

For a private company to become a public company, the following documents must be filed with a special resolution:

1. Official copy of the Special Resolution

2. Changed Memorandum of Association (MOA) and Articles of Association (AOA)

3. You don't have to get a certified true copy of the board resolution.

4. Notification of an out-of-the-ordinary general meeting (EGM)

This meeting is held to pass the board resolution, which is the directors' approval to change a public limited company into a private limited company.

E-form, Inc. Form 27

It is the online form for changing a public limited company into a private limited one.

The meeting's minutes

The person who wants to change or convert the articles of association must send them to the MOM for approval.

​​How to turn a public limited company in India into a private limited company

Here's how the change from public to private is done:

Call an EGM.

Set up an extraordinary general body meeting and invite your members, shareholders, directors, creditors, suppliers, and most of the other people who are always involved with your public limited company.

Send the meeting's minutes.

Within 15 days of this board meeting, write up the minutes.

Sign up for the dematerialization of your shares.

If you haven't yet dematerialized your shares, use the Form MGT-1 to add your name to the Register of Members.

Get the permission letter.

To start this conversion, the company must get a letter of consent from the directors.

Pass a resolution with no opposition.

Hold a general body meeting and get a "no objection" from your company's members and creditors.

Change the MOA and AOA if you have to.

Both the Memorandum of Association and the Articles of Association should be changed.

Conversion Filling out an application

Fill out Form MGT-14 online through the MCA's online portal. When you do, upload the letters of consent and any other necessary documents.

Conversion Commercial

Within 14 days of sending in the MGT-14 form, this conversion process should be written up in both local and national newspapers. Once your application is approved, the conversion from a public to a private limited company will be completed.

​​We'll help you change your public limited company into a private limited company.

We at Certpedia can help you change from a public limited company to a private limited company from start to finish.

Our Process

1. Helping you set up the meeting

2. Help with getting the creditors' NOC.

3. Sending in the application to change

4. Looking over the application and making any necessary changes.

5. Making sure that your business entity is changed in the way you want

Certpedia is a law consulting firm that assists both public and private limited companies with their legal needs.

So reach out to us and take the first step toward this change.